gdp unexpectedly drops, sending markets with it. aficionados are not going down, they are going up. spending more at auction to in new york city. we are going to take you there. stephanie: welcome to "bloomberg ." is will quickly tell that it friday the 13th without us telling you. david: feeling lucky today? stephanie: hopefully lucky. this is an unlucky day. cory johnson is with us, our tech editor. thank you for being with us. welcome to "bloomberg ." and a louise is

joining us for the first time on a friday. david: we have to get to the first word with vonnie quinn. peshmerga raised the flag in a northwest iraq he city. cut militante to supply lines. an executioner may be dead after a u.s. error attack at american officials say the drone strike yesterday in syria targeted the men noted at -- the man known as "jihadi john." sources say there is a high degree of certainty he was killed. refugees from macedonia to serbia today are seeking asylum in europe. westbound migrants are moving across the continent while walls are built to block them. some refugees are passing into bulgaria am a telling human rights groups they have been attacked and robbed by the police.

you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. now let's have a look at what is moving in premarket with matt miller. matt: let's look at futures here. we are down across the board. we were little changed in our ago but we have moved lower here. china boosting its margin theirements, and here in u.s. we have negative retail news again today with nordstrom's shares plummeting premarket after missing estimates. take a look in the bloomberg terminal, and you can see i pulled up the weei, the world equity indexes. read across the board. europe is trading down. this is yesterday's. it will not go live for another 2.5 hours, but red across the board everywhere else heard

except for commodities. commodities had a little bit of a bounceback. it looks like we will close down the week 2.5%. that breaks a six-week winning streak. now let's go to commodities. a little bit of a bounceback, and i stress the word "little" because they were not big gains in commodities today. oil came up a little bit. you can see the intraday trade is up 1% now, $42.13 per barrel. trade will look grim no matter what you put up there. nymex crude down about 5%. look at thatt's stock right now, trading in premarket down 20% after a miss. a real slew of negative earnings from retailers this week. a real disappointment, and what does that say about retail? we are actually going to get

some breaking news at 8:30 when we get retail sales. stephanie: as much as i tried to do my part to jack retail sales up, it is not happening. anna-louise, walk us through this. nordstrom is one of the first retailers that really got digital rights ahead of the others. much?, not so >> we are seeing weakness across the board. we saw nordstrom and macy's, but then kohl's came out with good results. more broadly, the retail group is not doing that great right now. david: how is kohl's in the mix? >> kohl's was good. there are some customer preferences, retail is obviously prone to people's preferences and fashion trends. cory: so kohl's got the mix right, macy's screwed up. some of these retailers

are dealing with higher labor costs and competition from retailers like amazon. david: how much of this is the internet phenomenon that is amazon? up 115% thisck is year, so it is doing phenomenally well. whether or not they are taking away from retailers is a question that is hard to know, but there is weakness across a variety of retailers. home depot is up this year, but the stock is not a strong as it has been in a few years. stephanie: i guess my confusion, when you have dollar tree, macy's, and tiffany's, all completely different price points, what does this say about the economy? you could charge anything and people would pay. cory: particularly when it comes to rent and housing. we have seen this dramatic drop in oil and gas, and it is hard

to underestimate how important it is for the retail sector because people have a lot more money in their pockets because the cost of gas has gone down. stephanie: then shouldn't they be at the shopping malls? cory: so my question, when we retail, itsults with might be a bad retailer. sales are up significantly. david: apple is not having a tough time selling things. stephanie: that is a good point. department stores are selling housewares and technology that you make such a low margin on. you are not going to make a lot of money selling toasters, but you make a significant amount of money selling t-shirts. cory: this goes all the way back to the fed conversation, that how is inflation measured? billu look at your cable and you tell someone there is no inflation in the economy, they

will tell you you are crazy. when you see the money they are spending not maybe on stuff they would have bought at macy's but what they would have bought for their apple iphone, there's plenty of inflation in their lives. anna-louise: there is this notion that people are going to be using the money they are saving at the pump at stores and restaurants, and maybe that has not materialized. david: you do not go to nordstrom's and macy's to buy electronics. you could. macy's can have it shipped. has so much real estate, and at this point that is an overhang. go to macy's can to buy electronics, but you do not. --y's has an apartment macy's has done a partnership with best buy. they have lived in areas where there are strong verticals and they are partnering with outside retailers. do these retailers now have to

panic and shift? we are going into the holiday season. this is the home stretch. if they do not get this right, this is the wrong way to start 2016. will we see them change course? anna-louise: investors will be foring at this season strong results. there's a very high bar to do well at this time of the year. to see be interesting how some of these do, but in terms of how the investors are looking at them, they are very critical. david: also, the shopping mall in america is a destination for retail, but it has died. power walk through westchester. cory: it has been taking place in the last few years, a move away from the shopping mall and

that kind of spending. that has been a change we have seen as well. david: let's go from retail to wholesale of a sort -- cisco. matt, we also had earnings for cisco after the bell. matt: weaker global economic growth, and the strength of the u.s. dollar hurting international sales. from ahearing this story lot of big multinational wholesalers. what i want to point out -- and i know you are going to talk to chuck robbins later in the program -- is his shareholdings in cisco, the company he is now running since this summer, have diminished from the beginning of the year. so here you can see on the -- iberg hds function obbins to lookr at chuck's holdings. at the beginning of 2015 he had 580,000 shares. he has sold 75,000, a little bit more. the question is, why did he do that? there could be a number of

good reasons to do that. the share price had appreciated significantly from when he bought in. i love this point. this is not something you would get outside bloomberg. remember, you want to see the ceo of a company you are backing as a major stakeholder. you have got to wonder, why is he reducing his position? vonnie: he's -- anna-louise: he still -- matt: he still owns half a million shares. cory: how many did he sell? matt: 75,000 since the beginning of this year. cory: come on. selling stock means many different things. david: all i know is i want the parto have a substantial of their net worth tied up in the company they are running. stephanie: it is one of the reasons, perversely, people backed mike pearson and valley

and -- and valeant so much. cory: he took so much money out already. he is all in a set that he is all out and the stock goes down. goldman sold him out. cisco -- i interrupted david. david: it looks like the business should be growing overall. if you look at the internet traffic, we will need more of what cisco makes. so in the long run, they are in the growth business. they should be. cory: cisco is selling internet markete, where the whole is going toward rented hardware and software, the cloud. buyd: but someone has to the hardware to rent it. cory: but they need a lot less of it. ,f you compare cisco revenues which were up single digits, but

compare them to hewlett-packard, ibm, oracle sun business. you see those companies shrinking. we have got to take a break. when i think cisco, i think one and only thing. matt miller? matt: john chambers? stephanie: incorrect. the artist behind the song. , thank you jackson for joining us. matt, you are not moving, and neither are you, cory. we will talk a lot more about cisco with their ceo, chuck robbins. .nd also, federica marchionni she wants to bring in younger, cooler customers. we will find out if that is happening. friday, this businessman went to detroit.

this is unfair. david westin is going to know the answer. are we going to do a new jersey one next week? he graduated in 1961, first invested in real estate at the age of 20. tweet us your answers, or you thesend us your answer on bloomberg terminal, "bloomberg ." cory, is that you? that is amazing. i do not know what is better, cut, orsses, that butt the fact that your collar is up a little bit. that is amazing. i cannot wait for the commercial break because i need to use so many words that i cannot use on television to talk about that picture. "bloomberg ." we will be back in two. ♪

stephanie: welcome back to "bloomberg ." today we had to europe where economic growth unexpectedly slowed in the third quarter. hans nichols joins us from berlin. how does the vulnerability of this whole region -- talk through it and what recovery looks like. hans: recovery is a long way away, a real recovery. some would argue that what is happening now is recovery, even though we have these middling numbers. 0.3%e comes in at positive , and it is kind of a sigh of relief. these numbers are not great, but they are not horrible either. when we look at the third quarter, in the beginning we had greece uncertainty, then china's slowdown, that at the back half

the volkswagen scandal. the fact that the german numbers are not worse is giving a sigh of relief, a clear indication that mario draghi will probably get his printing press ready. you will see a lower euro, which means, stephanie, you will get a steal in the alps for skiing, come march. stephanie: can you break down the spending? yesterday david and i sat down with ron perlman, and he said that france is the one place in europe he does not like to do business. hans: consumer spending drove a lot of this, so it was up 3.4%. then you have on the inventory restocking, 0.4%. then you have on the negative side, exports down, 0.4%. we had cpi numbers yesterday. they give you a great breakdown of what is increasing in price and what is not. hopefully we have some charts up for you.

here is the puzzling one. potatoes, the price of potatoes, is up 31%, but potato sticks and potato crisps are down 12%. stephanie: hold on a second. how important to their economy, how telling our sweet peppers and potatoes? i am going to tell you, sweet peppers play no role in my life. they should. you are making almost an not eating error by them. consumers are feeling richer and we are seeing it filtered through in consumer spending. theo not know because germans do not break down the numbers for another two weeks. it does look to be consumer driven. one caveat is that if your great hope for the european economy is able races german consumer -- is

a voracious german consumer or, you will have a big problem. a 31% increase in potatoes is crazy. stephanie: david westin wanted to speak to you today, but i was desperate to do this interview, hans solo. get it? no one here is laughing. i am, though. have a great weekend, hans. for you here, you have to check out this instagram post by our very own bloomberg account. one of the few things my kids want to watch today is a bloomberg terminal made entirely of legos. this picture was snapped at the wise conference 2015 this month, bringing finance and fun together. first of all, i happen to think finance is fun. when we come back, we will talk tom-tom, the navigation company soaring on a contract.

you are watching "bloomberg ." ♪

david: welcome back to "bloomberg ." that is a pretty washington today. stephanie: i want to wake up in d.c. today. it is beautiful. david: tom-tom hit a six-year high yesterday after striking a digital map deal with uber. it is a very interesting business. the mapping industry is interesting. gathering information to supply the maps to our phones, to our cars, and for those who have personal navigation devices, garmin devices. few companies a that gather that information, and they suddenly have enormous value in that data. david co -- david: this is a small player.

matt: compared to garmin they are small, but riding with uber often lately, drivers are not using the navigation systems, whatever they have on the dash. they are using their iphones because everyone uses waze. while it has boosted the stock significantly, i fail to see how much they are going to gain because most uber tribes will just use a phone. disclosure, 10 years ago -- cory: folders closure, i was full disclosure, i was short 10 years ago on garmin. carmen was the dominant provider for personal navigation devices in europe. sorry, garmin was number one in the states. it is an interesting company. but not owning the map

information. the map information is owned by tomtom. audi and bmw came together to buy it because it is all about the software, all about the data. matt: i mean, that is an interesting story and other countries will use mapping systems. but the question is, for me, how many of these pnv's will be sold? i cannot see a future in that. stephanie: nobody go anywhere. we have to take a quick break. up next, the morning must-read. tom keene will be joining us on "bloomberg ." ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. >> welcome back to bloomberg "." johnson.re with cory

our cohost, erik schatzker. and tom keene. good morning. let's go to first word with vonnie quinn. coalitione misled will hit the islamic state by the pocketbook. they are hitting oil fields. it generates $40 billion a month for the islamic state. donald trump attacks ben carson. it happened last night during an iowa campaign stop. trump marked carson -- mocked carson saying that when carson attacked someone as a youth that he is shocked iowa residents are backing carson. >> how stupid are the people of iowa, this country, to believe this? here is the good news. he is now saying all of that stuff happened, because otherwise he is a liar. several polls show

carson leading trump in the race for the presidential nomination. the iowa caucuses are three months away. your fresh thanksgiving turkey could be smaller and cost more because of the bird flu. it killed a million turkeys in 15 states. are largelys unaffected because they were processed before the outbreak. these, andet more on other breaking stories, 24 hours a day at bloomberg.com. david: you have a fascinating morning must-read? tom: the economic club in new look you really begin to forward to where we are going with higher interest rates. thetailing that, this is financial regulation in the in nine of the kingdom, lord turner, he has been a real voice for a more straight thought versus austerity.

the morning must-read is milton milton friedman who explained clearly why inadequate nominal demand is one problem that has one possible solution. that any size of helicopter money job would depend on how much people spend rather than save. it is an iconic debate across the 20th century. if they do not spend it it does not matter. that is something that we have seen with macy's and nordstrom. david: i looked at this book because of your suggestion. i understand that one of the basis thesis is that credit is not always good. let me read another quote. stephanie: there you go. david: unless tightly constrained by public policy,

thanks make a economies unstable. he is talking about private credit. you look at private credit. the distinction of banks. was neveron that i able to determine was that is the swiss model the way to go? putting my cash on the balance sheet? you don't have to go -- why is it never the fault of the person who goes out and takes it? a bank cannot be trusted to get money for the right reasons. this is the argument he makes. i'm catching up to this late. i scoured a number of reviews. it seems the argument he is making is that people tend to blow money. when it is available people will use it for things like real

estate. it is not being borrowed to create real demand in the economy. that is why he says the central bank would be better off with a budget deficits. you can count on the government to create demand for the kinds of earnings that economies want to grow, as opposed to it and inflation of financial assets, which he says is worth too much. that is how i would imagine that milton freeman would be going insane. monitor is him was an approach to controlling prices rather than demand. tom: i would also suggest something cultural. kingdom, whether it was rbs, and the others. we did that her. canada is saying we never had this problem. -- we did better. canada is saying we never had

this problem. this is a very dense book on what we need to do to fix what we messed up over the last eight years. david: i wonder, how much of this. he came in the financial regulation in london just before the 2008 crash. he seems to be deeply affected by private credit as it affected real estate and what he had to help clean up stephanie:. why is that the fault of the bank? tom: it is not the fault of the individual. it is a systemic problem based on leverage. correct me if i'm wrong, but that is what credit suisse -- erik: the problem with johnson's argument or lord turner's argument is it affects the amount of destruction from the private bank. thanks take the deposit and need do something with the deposit.

if they don't create credit, no one will want to put their money in the bank because there would be no purpose. no one would want to capitalize a bank with equity. you wonder what the foundation -- can take those deposits and reinvest them in superstructures. think, erik, the layoffs and constructions that foreign entities woeful to over into american banking? will we move from 4% out the door to 9% or more? erik: it depends on what the shareholder demands. if the shareholder is satisfied in the 10% to 12%, that is fine. that is what the bank's delivery in the absence of interest rates.

they do not have that in europe. they are stuck in the single digits. stephanie: your favorite retailer earnings came out. matt? matt: i do not even think they have jcpenney in canada. jcpenney came out with a loss per share better than the estimates. jcpenney lost $.47 a share. $.56 are looking for share. that sales were up 6.4%. it is a shocking, mind blowing number from jcpenney. the company sees store cells up 4% or 5%. are falling. stephanie: following less than we anticipated, making it a good

day? matt: if the company goes by this much on the top and bottom line, i wonder if jcpenney is disappointing the market. they see cops sales of 4% or 5%. a month ago they released sales of 6.4%. maybe the market is disappointed with the outlook. obviously, stocks are a bet on future profit generation. stephanie: one thing to remember about jcpenney investors. kyle went along in stocks. investors bought in at the bottom when bill ackman was selling out. they need to get back on the road. matt: investors are selling shares in the premarket. david: we will keep watching. we'll see you later. we hope you will come back. the largest ever semi annual

auction season. those results came at a cost. that is next on bloomberg "." ♪

david: southern be sold $1.1 billion of art. this is boosted by steve:'s andy warhol painting and the state of its former chairman. ramy inocencio has been covering the auctions. it was a lot of money. how did they do? it was a lot of money, but not as much as in the spring. thatllion is the number they will want stock in their head.

that was according to an estimate of $1 billion. 1.7 billionas dollars. we are seeing a cooling off in the art market. a talk about numbers. -- at whatat one the paintings were in the record set. $2 billion changing hands. nine days of auctions from christie's to southern these in phillips. -- and some other bees -- and southerby's. this painting of china's mao zedong sold. his untitled canvas, and auction high for the artist. sold byht shaped work billionaire hedge fund manager steve:. and roy lichtenstein's "nurse." cliche, or the reclining

news, was the top prize. 1.70 $4 million. a record for the artist. did on by proxy and going to a chinese billionaire. these were the best of the best. .here were many misses this warhol sold for 2 million less than two years ago. other cheaper works failed to sell at all. blue-chip art did better. >> they are very savvy. best. want the they don't want the second-best. ramy: christie stands over southerby's for the most prized pieces, but it is a battle to get sellers to part with their art. >> it is to the death. ramy: the seller gets to walk away with the promised payout,

regardless if the piece se lls. a guarantee of $500 million to sotheby's xf chairman. >> is very clever. they have a special curated auction. a success.vent was the maglione is the 10th work to hit nine figures at auction. >> if i were a seller, i would say sell now. >> speaking of bubbles, do you think we are in one? the art world looks to spring 2016 for signs of any burst. david: you told us about the gross. that's talk about the net. the gross is a little less than

the spring. less than expected. how much are the auction houses make? out: the numbers are not yet, but in terms of the guarantees, which is what i want to get at, it was one of the biggest tools. a lot of auction houses are using fees to try to tempt buyers to part with their art. in terms of revenues, pushing that over the past few years -- 200 million dollars from 2012 to 2015, the net income is not that much. on the order of 20 million dollars or so. a huge push in revenue, but not payback in terms of the profit. david: has that been relatively constant, or is there more competition to get the art in the door and the margins are getting squeezed? just ae are looking at few auction houses. phillips plays in the midmarket, but we are talking about the top end. the liechtenstein that went for

millions. that is the top end of the market. where the prophet is, and were people want to fork over the cash. david: who won? do you know? ramy: $1.15 billion is what came out of sotheby's. christie's came out of $1 billion. it was a $150 million difference. they are still going through the numbers. there are more art auctions going on today. with the most part, the main stuff has happened in the last several days. next round, next spring. hope to be there. thank you, very much. still ahead, america recycles day is this weekend. one celebrity has a big role. adrian grenier will join us next on bloomberg "." ♪

stephanie: welcome back. you're watching bloomberg "." honor of america recycles day, dell and adrian grenier have teamed up with goodwill and to help new york city recycle old laptops and computers in a program called n.y.c. tech take back. i thought we were inviting you because it is sadie hawkins day, meaning that women get to ask a guy -- that is not why you are here. i am not going to do that. adrian, why are you involved? love technology and want to have the latest and greatest. we sometimes forget about the important recycling of that old technology. some of us to think about it, and don't know that less than is up cycled.aste

led with arawer fi graveyard of technology. we will make it easier for you to recycle that e-waste. stephanie: what is going to happen? where did they go? adrian: in new york we rely on public transportation. uber is making it easier by picking up your e-waste and bringing it to the goodwill to recycle it through dell. david: it is sent to goodwill? adrian: exactly. there are 2000 goodwill locations around the country. you can drop off your e-waste. it doesn't matter what it is. they will take it. make sure you wipe the personal data first. stephanie: why is dell doing this? adrian: they have a goal by 2020. it is part of their initiative

to make sure they can take out as possible,te given that they are one of the biggest technology companies. they want to give back. david: love is be a continuing program? i want to know what to do with my stuff. adrian: on saturday, tomorrow morning i will be in an uber helping to collect, but it will continue beyond saturday. stephanie: you will be doing it? adrian: are you ready? roll the dice, come on. we have a tax on electronic items. if you buy a computer or phone, e tax on thee-wast devices to recycle these, because it is such a big issue. adrian: we create 40 billion tons of e-waste every year.

.nly 1/6 is recycled we should start doing what we can to make sure the waste doesn't and up in landfills. not only will dell recycling if possible, but they will up cycle it. they will take the precious metals and plastics and put it into new computers. a facilitynt to doing this recycling. it was fascinating how they would pull out all of the metals. it on awould put conveyor belt. als toould use the met make other devices. they were pulling out every chip. stephanie: you had a kickstarter project for your lonely wall program. where are you? adrian: we went on an expedition and done filming.

we have given the scientist the money to do research. the goal is to study ocean noise pollution and hybrid whales and how it is affecting marine wildlife. man-made ocean noise. stephanie: why do you care about this? people who see you on screen inc. that is just a guy who likes chicks and parties. we are in the information age, a global village. we know what is happening around the world. it is our backyard. i feel connected more than ever to people around the world, my community, my neighbors. we need to clean up our backyard, the ocean. ambient light created by parking lots and street lights, is changing the environment. what species live on the earth. we don't inc. about this.

same with the oceans. park,ou go to a national look up, see the stars. you have an incredible moment. one reason we don't have that where we live is because of the lights, noise, and things that help our daily lives and hurt our environment. david: who are what taught you to give back? adrian: my mother always taught me to clean my room. stephanie: there you go. is a little my room bigger. i have a house, and i realize it extends into my neighborhood and community. stephanie: adrian grenier, cory johnson. we will be back with more bloomberg "" in a moment. ♪

commodities crunch. oil and gold are falling. all signs are pointing at china.

retailers feeling the pain into the holiday. that is not something that is going to stop a ceo from investing in the consumer. snow in ashton martin. how you can get behind the wheel of luxury this winter. ♪ welcome to the second hour of bloomberg "." bad fore: i almost feel brendan greeley, our economics correspondent. adrian grenier just left the set. this is a tough follow-up. tom keene, i heard he was watching -- sent out a tweet telling everyone that adrian grenier is leaving, i am arriving, and the world is

preparing to swoon. i'm wearing a suit. david: i think you would good enough. stephanie: enough. could pull only i off the stubble, maybe they would take me more seriously. stephanie: you know what, both of you can find our way cooler than adrian -- david: and better looking. stephanie: totally. more on that in the next hour. brendanot -- vonnie, versus adrian? vonnie: brandon all the way. -- brendan all the way. in iraq, 17 people are dead after a suicide bombing near baghdad during services for a shiite militia man killed while fighting the islamic state. pentagon officials are hopeful

that a strike killed jihadi john . he was targeted yesterday in syria. he is seen in videos beheading captives. hillary clinton is more than halfway to clinching the democratic nomination. she is backed by most of the 700 insiders who will vote at the convention. you can get more on these and other breaking stories 20 four hours a day at the new bloomberg.com. let's go to the markets with matt miller. looking at futures, they are down across the board. newsnued negative retail from nordstrom. not necessarily jcpenney terrier you can see the s&p futures are down four points. shares afterat pricing.

the secondary offering reducing shares by 50%. pricing the shares yesterday, closing at $29. we were looking at $31 and change yesterday. they are down in the premarket. nordstrom, disappointing earnings. disappointing outlook. nordstrom is down 21%. macy's disappointed at the start of the week. jcpenney beat estimates. everything worked good from sales to the bottom line, including the margins. the problem has been the storyear outlook, top .ains of 4% to 5% taking out the three quarters we know, that is four point 6%. not as good as what we saw in the third quarter. looking at fossil, they will buy wearable makers misfit.

are down 9%. fossil is down 21%. i will deeper into the misfit purchase. it doesn't look like the market likes it. david: not a pretty picture. a a lot of right up there. besides that, commodities is taking it on the chin. oil recovered a bit. oil and copper are still low. the commodity story has not been pretty for a while. >> no end in sight. really bad news coming out of china. having said that, we have prospects of a rate hike in december. there is a negative correlation with commodities. commodities as an alternative investment. is there any alternative in copper to china buying more? nothing from goldman

sachs last night. the short answer is no. without a recovery in demand in china, you will see a depressed copper market into next year. we put gold and copper in the same basket, but are we talking about two different dynamics? .imon: gold is very different it does not have industrial use as a metal. soldrically, old has been to people as a hedge inflation or alternative. if this guy falls in, like gold. when you look at the price over the last five years it has come down and is hovering over one thousand dollars an ounce. it is pretty bleak. david: taking the two to demands responsive in china, when will the supply of just? simon: gold is not a supply driven market. forer, we are waiting

cutbacks. we had cutbacks in the margin. glencore last month said they were going to cut back, or have cut back production, for example, in zambia. we need other high-cost producers to throw in the towel and say we are throwing down this mine for a year or two to lead the market rebound. that has toomething suffer to get to that place of realism? simon: they do. that is one of the problems. companies aren't suffering. we talked about glencore being beaten up. it still makes money. it is still profitable. the concerns are in the future and whether it can service its debt. other big mining companies are profitable. their margins are increasingly thin, some will have to cut their dividends, but a lot of the big ones are not feeling the pain yet. david: matt, i think you have

something? is seasonal. this with commodities, looking at -- stephanie: i hate this argument. you some truthow in the form of a bloomberg chart . a lot of clients love this chart and mail and to me, how did you get that? type s a g and click on the heat map. 2015, it is november. we are down 6.6%. years, november, typically not a good month. almost all red, and this is not even the worst november. in 2008, down 11%. 2007, 9%. november is a rough month for copper. brendan: we're looking at november 2008. look at the arc of copper prices from 1999 two today. you get a heartbeat lip in the

middle, then it pops up again. if you are talking about 2007 and 2008, it is a six year low. red month.ly a very out of the last 10 years there were only three positive years for november. that is the most red of any month. november over the last 10 years has been the worst month for copper. would argue the season we should look at is the year of according to the chinese calendar. are we in the year of the monkey? he year of the commodity is when the super cycle dribbles away. has you like that adrian grenier? stephanie: the year of the monkey. i would make a champ joke, -- a chimp joke, but i won't do that.

brendan, you're here with us for the hour. tweet us or instant bloomberg us your answer to this. the 19 61 graduate held the record for the youngest cpa in michigan history for a total of 56 years. he went to high school in detroit. tweet us your answer or send us an id on your terminal to bloomberg "." you can send us a twitter question. end joins us.ds next, an investigation into the treasury market. more on that. ♪

vonnie: i am vonnie quinn. systems is dialing back

its forecast. the reason is the strong dollar and a weak global economic growth. those factors are keeping companies for managing the gear -- from buying the get that manages interconnec= -- manages internet traffic. with comcast. apple will shut down beats music. they want to shift users to the subscription music service that launched in june. they paid $3 billion for beats last year. thatanie: they paid all of money. it is time to make it happen. we have to move on to the treasury market. treasuries i consider to be the least transparent part of the banking world, and they are under scrutiny by the department of justice. they are looking at the trading of treasury bonds. here is bloomberg's keri geiger.

: the investigation is heating up. we reported the department was interested in looking at the market. we know where they are zeroing in. it is this portion of the market, it is in stocks and bonds. they are placeholders for investments who want to get a hold of a specific treasury at auction. sent letters requesting information from the 22 primary dealers asking for how those issues were security are managed, and how they manage their overall treasury operations. the underlying issue is, what the doj has looked like in this market and other markets, is interest rates or foreign exchange, is whether traders at different tanks are sharing

client information -- which could be considered collusion under antitrust laws. or, if they are gaining the books on whether the prices go up or down, depending on differentials between what is issued at treasury auctions or securities. we have,e information does it come from the department of justice or the civil suits? there have been a lot of allegations through the civil suit. more than two dozen have been consolidated in new york and other places. they have zeroed in on the fact there is collusion in the market. they allege that. whether or not they are overstepping, or if that is true, that has to be determined by the department of justice. mechanicshat are the of the collusion the treasury is looking into? talk whether or not banks

to each other, sharing client information, which could influence the way prices come out on the other end of the markets. it is 2 parts. if the information impacts where people are paying for the treasuries, or if just the active talking to each other, which is considered collusion. in the foreign exchange market banks paid $6 billion for only talking to each other about sharing client information, which can move prices a little. they were not charged with moving prices, but that conversation can be illegal. after the evaluation it to change the regulations. there have been examples where it is common practice on wall street to behave this way. keri: that is what it is. these markets are like, this is how we do it. they have all of these markets, they have spotty regulation.

there is not one regulator overseeing these. the doj has found this is a group of products they can zero in on. david: in the complaint from the civil suits, there is circumstantial evidence and that there is a disproportionate number of times when the initial number was higher than when it came out. statistically, they say that couldn't happen without someone -- keri: that is how they drive the allegations they are making. brendan: the might be market forces driving these. it is in the last four years that we have seen these numbers become harder to believe. that is when the primary dealers are binding lower margins. are they being driven into this? keri: a lot of the markets have been under investigation, including treasuries. whether or not that is driving banks to fix prices or make more

money based on differentials between securities and what they are buying or selling at auction -- that is what the department of justice is -- stephanie: sorry. people are not paying attention when everyone is winning. higher to the crisis, we are all going in the same direction. no one is showing up saying, curfew time. changed they have auction once before, are they going to do it again? have anytime you interest-free wide scope investigation, things always change. whether or not it is through a regulator, guilty pleas, the department of justice, it is the banks changing their internal practices to avoid another multibillion-dollar settlement. stephanie: kelly geithner. talkwe come back, we will about someone changing the practices. the new ceo of lands end is

changing to their customer is. become a is about to 5th avenue store. we have that and more. bloomberg "." ♪

david: all week we have looked at what to expect in 2016. $10 milliont selling engineering problems at the heart of jet engines. we have lived in the jet age for 70 years. it is arguably one of the greatest innovations of the past century. jet engine is not without drawbacks. jets are fast and loud. they need fuel. they're not great for the environment. many have tried to make improvements, but few can claim to be in it as long.

mike is an engineer, a good one with 66 patents to his name. one idea could radically change the jet engine, something simple yet fiendishly difficult. he and his colleagues have been at it for 30 years, spending $2 billion in the process. they think they are cracked it. >> the problem with a conventional gas turbine engine is that the fan that generates thrust at the front of the engine is slow for efficiency. the turbine driving the fan at the back of the engine once to spend fast. you attach the turbine to the fan, it is running at the speed it wants for efficiency. >> your created something that solves that problem? >> yes.

we solved the problem of compromising the fan and driven by introducing a gearbox in the shaft reducing the speed of the fan, letting the turbine spin faster. each component can spend at the optimum speed for its best efficiency. >> wasn't you want the fan to spin slowly? that's seems counterintuitive. >> the reason you want the fan to spend slowly is because when it runs fast it will generate pistonses because the are going supersonic. that generates drag. by slowing them, the fan becomes more efficient. a 15%t efficiency is reduction in fuel consumption. modest, but it has a real effect on an airline's bottom line. >> they will save $1.5 million per airplane per year. also will limit fewer

pollutants. it means an engine that is quieter, 75% quieter. me. no, i am still in florida. am standing in front of a jet engine, testing how loud it is. you can hear me, right? yeah. all right. i love you. bye. it worked. >> we might fly on a plane with these engines by the end of the year. currently, they are being tested for two months making sure

things will break them. in an age when new technologies can arrive daily, a 30 year project -- here's hoping his breakthrough will pay off for a long time. david: matt, what does bloomberg say about jet engines? and whitney is an interesting subject. there was a profit warning that through stock into a tailwind. rolls-royce broke out of a partnership with pratt & whitney. jet bust has dragged on stock. we will take a quick break and be back with more on bloomberg "." ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. stephanie: a beautiful shot at midtown manhattan. that is where we are right now and you are with us watching

"bloomberg ." we are joined by our economics correspondent brendan greeley. a very special guest, the lands and ceo. ceo.nds end the retail landscape is all over the place but it is 8:30. o data onreaking ec retail. we go to matt miller. matt: it does not look good. very disappointing. retail sales, the headlight number is a gain of .1%. we were looking for a gain of .3%. we got 10 basis points. as far as the number x auto sales, .2%. we were looking for .4%. half of what we were expecting. x auto and gas, it is not fair

to add them in. a 10 day moving average to show you the trend, it does not look good. it is down and it will be worse after you put this print in there. along with the numbers we got macy's, theom and outlook from jcpenney, things don't look so hot going into this holiday quarter. stephanie: that is not a positive for retailers. we are looking at these retail numbers, you just joined lands end in february. tell us about the retail landscape. : it is very challenging. in have to be even better doing your job, have to be even more creative, faster than every time. and nimble. those are the elements that will be key in every strategy. stephanie: that requires

investment and you are making big investments. you don't have any physical stores in new york area. a pop up on very expensive fit avenue. you are looking for a different consumer. -- 5th avenue. i joined, ihen assessed the business, the first thing i saw is that we have efficiencies to make. was made the previous year when i joined. i'm glad to say that we are not spending more than what was planned. i found efficiencies and i will look for more next year. theound a balance between number of catalogs, the breaking point and the possibility is growing on the catalogs.

we need to introduce a digital catalog. for the first time, we have people that can shop online and can go and see our catalog, click and immediately by what they like. david: how much of your business at this point is out of a traditional catalog and how much is online? frederica: we don't sure exactly that data. a significant amount of business is done online. people like to look at the catalog to understand what is our office -- the catalog is our store. --need to keep happening they get inspired. one of the things i did because the catalog is very important is to revamp, reengage our consumers to the catalog. it looks different. i hope you saw it and i wish everybody will see it and

appreciate it. i received a so many compliments. it was encouraging. print magazines went through this transformation six or seven years ago. if i understand correctly, you are shrinking the number of catalogs you are sending out. what are the metrics used to figure out who gets them? >> we have all the data to see who is buying, what they are buying, how much they are buying. select the best customers and send every catalog we produce. there are customers who don't shop with us who are continuously getting set catalogs. stephanie: how are you getting us to change the way we think about lands end? myuy those moccasins for kids come of canvas bags, we know the brand. but we are not familiar with this new strategy.

how do you make people aware? >> the first things i did come in best in the brand. -- invest in the brand. it was the first thing i can do immediately. i chose my priority in terms of what i could do to impact this perception. the first reaction is the advertising. david: we have a video of your pop-up store right here on 5th avenue. a big venture. there we have it. brendan: what is the financial goal behind the new brand? this is about more than just becoming more fabulous. come fromenues will online. we are very strong in the u.s. we need to grow certain areas like california, florida, texas

where we have a strong swimwear line that we did not grow in that market as much as we could. internationally, we are not strong enough. was in japan to relaunch lands end and the new strategy we have today. the catalog as well can grow. we need to find the right balance between the true catalog ization that isl happening. retail and wholesale is a big opportunity for us. david: how'd you change what is a very respected brand in the catalog business into an online in the perception of the consumer? we think of the catalog. >> we will not completely change

what we have because this company is such an institution. i respect my customers very much. i would like to continue to engage them. the catalog for me is my number one priority. my loyal customer is my number one priority. i'm not going to change, i'm going to make them happier. the new customer, the younger generation, they are not even home to receive the catalogs. they buy on their mobile phones. that's why we need to also start this longer-term success. we will reach that. stephanie: lands end was considered the jewel in all the sears verticals. how much pressure are you wonder, what is the timeframe for you in terms of really turning everything around in terms of stock performance? the stock has not gone in the

right direction. how long are you giving your self to say this is when we will start to see the results as far as our share price? frederica: the put pressure, but i put pressure on myself. growerformance needs to and we need to be realistic. to reallye time -- you in the consumer were asking me how we change the perception. we don't need to change the perception. it is a great brand, but we need to include the modern consumer. it will take time. we need to be realistic. it will take a bit of time.

matt: i am just looking here at the short interest on the bloomberg terminal. since 2014,a look, we've talked about the yellow or orange is a short interest, white is the stock price. it has recently climbed up to 39% of the total flow. how do you communicate with your shareholders or with those shorting -- do you know who this position is? is this one or two funds? not a company for a short-term investment. at the moment especially. but who really believes this will be the new biggest opportunity in the market. and it is, which is why i joined the company. they will be rewarded on a longer-term. brendan: who has gotten this transformation right? we watched banana republic

become a completely different brand. >> there are several brands, several companies. we learn from them. ones?n: which >> i don't like to mention others -- stephanie: there may be success stories you look at overtime and say they have done it right. it doesn't have to be in retail. study and my in my approach to the business is to look at who has done this in the short term. i look at their performances, the revenues. to see who has done this well and learn from them. i also like to learn from mistakes of others. and avoid those mistakes. we don't -- we need to learn

from both. stephanie: what have you learned? you're coming from a very high and brand to a company that has been in existence since 1963 not based in an urban center. how has it been for you? >> from the company i was working with before, i learned many, many things. the first thing is to be very competitive. they think very big and their attitude is to think everything is possible, you just need to accept it. that's what i'm trying to translate into this company. we were very nimble and we need to be nimble to face every challenge. stephanie: we have more breaking news.

i will make an abrupt change from clothing i grew up wearing to drugs that i hopefully don't take very much. mylan gaining as its takeover gerigoidot fails -- para fails. mylan no longer has to make this unsolicited bid. shares up 9%. rigo, those investors are disappointed that this is not going through. the shares are down 11.5% on the news. mylan shareholders relieved that they don't have to pay that kind of money.

david: we will come back to retail after the break. more on the outlook for lands end with frederica next on "bloomberg ." ♪

stephanie: welcome back to "bloomberg ." vonnie: the world's oil stock levels.ecord the international energy agency says and swelling surprise guest swelling supplies -- says swelling sh pricescould puc federica even lower. jcpenney shares lower. they did not raise their sales forecast for this year. 36% so far gained

this year. david: we are back with federica marchionni, ceo of lands' end. joining us is chris from bloomberg pursuits. welcome. we are getting into your territory. stephanie: luxury, that ultra high-end used to be bulletproof. not anymore. what is going on? chris: things are changing in china and russia. the american dollar being strong is hard for companies. people are struggling to keep up. stephanie: asia was the one bastion of glory where you knew those consumers wanted those luxury products. what did you learn there? federica: i was there to meet , to strengthen

the relationship we have with the current vendors. one-stop in china, one-stop in japan. was tighter. you need to do even more. i saw that change. i saw that the customer was changing. the future will be much more online, less retail presence. traffic andger products that have great quality but are not overpriced. we need to focus on quality but

fair price. that's what the consumer wants today. we don't always think about is climate change in the weather. how is this affecting everybody? it is not as cold anymore. i can make a lot of changes. everything in my power i will make it happen. the weather is not in my power. i cannot change that. unfortunately, this year we had two bad situations. spring, weng of this did not have spring this year. ,ummer was short and then now it is like spring when it should be much colder. every company that has outerwear as the number one product, they've been suffering. chris: something we think about in terms of luxury is fit. fit is the ultimate luxury.

i wonder what you think about -- bigger brands point,a: it was my first where i come from where the fit is the strength of the company. is tost important thing give the right fit for different people. i don't want to change completely -- we need to update the traditional. customer, we need to be very productive. the new customer wants a different fit. stephanie: i think the new lands end fit is working. we have to leave it there. federica marchionni, the incoming ceo of lands' end. chris, we will make you work overtime. next, $50,000 headphones and

snow racing in aston martin. we will stay on the luxury beat when we come back. we have to talk about this. won theaire joseph lau bloom of diamond. moon ofit the blue josephine after his seven-year-old. ♪

stephanie: is now time for the pursuit of happiness. what do you have for us? chris: this week, we have a story about a school in colorado where you can learn how to drive your asked martin on ice. -- aston martin on ice. this is racing, coming around turns, drifting. $10,000 for a weekend. people come from all over the world, men, women, grandma's who

have a need for speed. david: that looks like fun. chris: it is kind of a scary experience just on a road. brendan: this is paying to be james bond. i have seen that movie. everyone would do that. $10,000 does not seem like that much for experience that special. looking --you're $50,000 pair of headphones. the best headphones ever made, they are saying. is it like bono sitting in your lap singing to you? >> it comes with an amp that has gold, platinum and marble. they are not even noise canceling.

they are not even portable. brendan: the tube amplifier in the marble base, you talk to audio files who go crazy because they cannot tell the difference but they are trying to justify it -- >> it is a warm sound, special sound. coat-pepsiuld love a -- coke-pepsi taste test. they will test them out during the commercial. damon and i will be back in just a few. -- david and i will be back in just a few. chuck robbins joins us. ♪

david: we are 30 minutes from the opening bell in new york. welcome to "bloomberg ." stephanie: excited that it is

friday. schatzker, it is a spooky, it is friday. erik: the chairman and founder of axiom capital management is here. good morning to you. happy friday. >> friday is good, the 13th is bad. it is mixed. erik: why don't we start this hour with the first word from vonnie quinn? vonnie: pentagon officials hopeful but not certain that a john.rone killed jihadi videos on the web show him beheading six hostages. police in iraq say a suicide bombing killed 21 people today near baghdad.

it happened during services for eight shia militiamen killed. better technology is needed to analyze the final seconds of the cockpit was recording. -- voice recording. you can get more at the new bloomberg.com. sour retail prospects dragging down futures this morning. the s&p is down three points, down is down 35 points. jcpenney and nordstrom among the first shares to trade today after disappointing earnings reports -- nordstrom was a disappointing earnings report and disappointing outlook. shares are down 21%. jcpenney beat on earnings, be on margin, be on revenue but its

outlook for same-store sales may have disappointed investors. stores, all's, ross these retailers trading down in the premarket. a pretty negative day and we had the retail sales numbers out also a disappointment. i want to talk quickly about myl go.and perri perrigo shareholders did not accept the offer. mylan shareholders looked relieved they don't have to pay the money. rrigo shareholders seemed disappointed. maybe the expected a bite to push the valleys -- the value of the stock up.

jcpenney had 6.4% sales growth -- you figured out that means -- erik: based on the first quarter and second quarter comment feels the momentum they had in the third quarter is not going to last. is kind ofar outlook what you got in the second quarter. after 6.4% in the third quarter, you're looking for something else. matt: always want something bigger and better. erik: yes. time for the five stories that matter to markets. international energy agency says there is a record 3 billion barrels stockpile of oil globally and that may deepen the route and prices. that may happen even as fuel demand grows the fastest taste

in five years. the swelling surplus is due to strong opec read -- how do you feel about oil right now? >> energy is in a classic boom bust and we are on the bust side of it. once you find supply coming does not evaporate. evaporate.not -- the oilbeen some is still out there. the technology allowing them to extract it more efficiently. the longer-term story is demand at a constant is a killer. erik: what price are you using? >> it depends what area of the energy market your in. there's refiners. these conditions are pretty good for refiners because their input costs are going down, they have cheap supply and their margins go up as long as prices remain relatively high.

the scenario that can be bad for everybody is that if prices plunge below 30 or 28. -- if you areust a, you are watching these things did lower and lower. -- if you are a valuation guy. stephanie: the front office charged 10 former deutsche bank and barclays employees with manipulating the euro denominated equivalent. christian was among those charged. of element intest the global investigation into interest rate benchmark rigging. it seems this scandal is not going to go away. christian is the deutsche bank trader who is most likely paid 140here between 90 and million dollars in a single year at deutsche bank.

he went to blue crest where he had to leave. he has been embroiled in this legal battle. erik: it is not going away. meantime, christian is winning ground against regulators in a separate but related action. it shows how much attention is still being paid to these people years after the alleged violation. david: you remember janet yellen's testimony. -- said we still have not you don't want to be told here is another scandal. to get theing regulators to say enough regulation. the regulators say we have not gone far enough, guys. >> it's likely to swing too far the wrong way. what happens with regulators, we get problems that don't go away, the whole psychology around that is that we have seen it historically that regulation swings too far, we get business

conditions that look less favorable for people in the financial industry and there's excessive cost. i'm worried about it. for us to compete with european banks, if we are overregulated, it is putting us at a disadvantage. david: central-bank stimulus. stephanie: definitely not going way. david: european growth slowed in the third quarter. mario draghi end ecb examine the need for fresh stimulus. .3%, down from .4%. at what point do you say it is not working? they're trying to get the inflation rate backup. -- back up. maybe they don't have the right tool. >> what works best is surprise.

one thing they are lacking in this case is surprise. they are all copying been. they came later to the party and did not do it with as much force. a traction in the real economy and equity markets and asset prices stay up. we see a lot of jawboning. the economic performance has been disappointing because the capital has not been put out early in an unexpected manner. very difficult situation because they are throwing cap let something the ears are not catching. those asset prices will be placed on real economic activity. numberie: denver for -- four, falling 8.1% after the company says full-year sales and profit may miss analyst estimates amid weak demand in

the u.s. and hong kong. the beat keeps going on. whether we are talking macy's or walmart or high-end brands like tiffany's, what does this tell you about the global economy? >> you can come up with whatever excuses you want for retail. stephanie: the weather is my favorite. ulge, internet, whatever you want to come up with. there is so much of this news that you have to extrapolate that some of that is a sign of a weakening consumer and that may bother the equity market. erik: number five, the ipo that did not happen last night. loan depo went through its offering just hours before it was scheduled to price. it would have been valued at $2.6 billion.

loan depo is withdrawing due to market conditions. did not elaborate or specify. came to market this morning with a smaller than planned secondary offering at a lower price. it makes me wonder whether the new issue market is in a bit of trouble right now. >> the buyers seem reluctant. investment bankers like to get paid. these deals are not happening, they are sensing that we are crossing a line from these deals , fairly priceda and the discount they are going to get from these prices. it looks bad for investment banks to do these deals and have them sink below offer price. the whole syndicate gets negative on it. it is a sign that equity markets, financial markets are not going to accommodate anything other than discounted prices. and squares ipo has yet to

happen and that is already coming to market at a discount. we have lots more to talk about. those are the five stories that matter markets right now. stephanie: we will be speaking to chuck robbins. john chambers loved talking the internet of things. we will see what is on chuck robbins's mind. join the conversation. ♪

vonnie: welcome back to "bloomberg ." shares of fitbit down this morning. the priced shares in secondary offering any discount to yesterday's closing price. the number of shares sold was reduced to 3 million from 7 million.

the $29 price is more than 8% below yesterday's closing price. 256,000 souls because the steering can fail. the recall covers certain souls from the 2014-2016 model years. the recall will begin december 22. --ces declined in october the light trucks are to blame. the consumer price index is the biggest in eight months. that is the latest bloomberg business flash. matt: individual stocks moving, starting with yum! brands. they said october same-store sales in china were up 5%. that makes investors very happy.

kfc alone up 10% in china. the company has had a real chicken problem in china. that is alleviating now. they expect 4% same store sales growth in this current quarter. loco came out with an earnings forecast that disappointed investors. it will earn $.69 a share. they said same-store sales will be about 1.7% for the full year rather than 3% growth. that is a disappointment. shares are down 15%. we talked about fossil earlier. they will spend $260 million to buy misfit wearables. investors hate that news. shares down 25%. fossil, the maker of watches and wearable devices down a quarter

of its belly. mylan'scome back, why bid for perrigo fell apart. -- down a quarter of its value. ♪

david: welcome back to "bloomberg ." a $26 billion deal that will not happen. mylan did not get the shareholder support it needed to acquire perrigo. cynthia kunz is with us now. what happened? >> i don't think this is entirely surprising. what they were asking perrigo shareholders was to give them a majority but they needed 80% to control a company. there was a high likelihood that they wouldn't ended up in this gray area between 50% and 80% and there was uncertainty about what that meant for shareholders and perrigo. signedrs on the perrigo

a solid as there is not a clear path forward here, let's step away. david: there was too much hair on the deal? >> the archimedes that have been frustrated. -- there are communities that have been frustrated. up andrning, mylan perrigo down. the idea that the combination would be good makes some sense. we've seen these things get a lot shakier. there are tax considerations. is an irish-based company. we have the combination of skill, to companies that have uc and acquired entities rising in value. -- you've seen these acquiring entities and acquired entities rising and belly good people

were suspicious that they were not maximizing value. -- rising in value. people were suspicious that they were not maximizing value. >> they are looking at the consolidation of the walgreens and rite aid and looking at their by a group and sing a smaller group. that is a very unusual combination. truly thenot really thought that it would be that beneficial for mylan necessarily. shareholders cannot be happier. but with a prefer? >> mylan needs to diversify. they have a reliance on epipen. does need to diversify. the pressure is on now for them to find their next deal. some names, the generics business or pfizer -- it will likely be in the generics space.

stephanie: this has seen so much volatility in the last year. why is it so heavily weighted? >> this has always been a great space from the long-term demographic in terms of the earnings growth and pricing. it got to an excess because we deals -- the leverage for those deals starting to work against them. leant, these stocks seem under a lot of pressure. a lot of stocks that don't fit the profile of having these negatives get pulled down by the sector selling that occurs. there is damage across the board in a lot of these stocks that are not negatively affected. with --ong companies

mylan and perrigo are the most actively traded stocks in the premarket. most space -- this is what i use the instant i get in every day at work. you can check the most active up, most active down. stephanie: i know we will dig into more and pharmaceuticals. for now, we have to take a break. cynthia kunz, thank you. i want to give you one of my favorites, the quote of the day. words of wisdom. "take a breath. nothing will work unless you do." i like that line. i will give it to my kids tonight.

next, we will take a deep dive into john malone's media empire. everything this guy does seems to work. he definitely works hard. we will be back with more "bloomberg " in just a few. stick with us. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment,

we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. stephanie: welcome back, you are watching "bloomberg ." we have liam dalton still with us. you say they are three things that investors need to pay attention to, what are they? >> it up the chance to have success in these market conditions if you pay attention not only to the fundamentals but also the technicals and valuation side, and not one, but all of them. case after case in the last couple of years, where if you were paying attention to just evaluation, you are sitting in walmart and ibm.

but if you focus on the technicals and the fundamental corporate performance as well, you would not be feeling that pain. i would suggest your best chances of making money for the next two years are going to be looking at those elements together. if you don't have those three elements working together, you are not in the sweet spot of what you should own. year, you until this did not need all three. the market rose pretty powerfully in 2014 and it was pretty startling to us. we saw stocks that were, what we thought single digits, trading up into the 30's. erik: the market seems to be rewarding success and punishing failure as severely as ever. why? flee. we call it flock and ,f things are not going well

the money is free to go somewhere else. if not, everyone is flocking to it. capital is more willing to be move and be discriminatory. you are seeing big dispersions. erik: does that make it more or less of a stock pickers market? if you get it wrong, you get killed. moore. if you are going to be a stock picker, you better focus on those three things. if you don't get the fundamentals right and the technical start to go against you -- the technicals are a good thing as well. if the markets disagree with you, don't argue with the market. move on and find a better idea. erik: are you that long right now? liam: we are short right now. october, we-up in saw the market spark. the fed said they were not

going, the dollar weakened. the s&p took off in october and people said it was the urine year-endd they all -- the rally, and they all come in. as we begin to run-up in a range like this, we would rather be shorter at the top of the range than be sitting there. you think it is fundamental weakness in the economy that explains what is happening, or is there underlying strength playing out in that massive jobs number from last friday that will translate into something maybe after the new year? like there is too much stuff out there. all these retailers are selling the same stuff. the guys that are able to differentiate are doing well. althoughactivity, hiring surprisingly picked up, we don't see it translating into real gdp growth.

we are churning up here and there are so many products being ffered at cheaper prices, and these are on negative forces on a broad sector. stephanie: uber and airbnb are not public, these sharing economy companies that have nothing to do with buying stuff, reducing what you own. they seem to be the future. they are killing it. liam: this is what happens when there is too much supply, marginal pricing goes away, inventories build, and then you have these announcements and equities are hurt. listen to the market. what it is telling you is the next eight months may not look good for these retailers. stephanie: we have to talk about allergan-valeant. you are a shareholder. i sat done with the ceo on monday. what do you make of what is

happening? if pfizer does not work out, why wouldn't allergan by valeant? they have the -- and loan is this. push the reputational risk aside, valeant has good drugs. liam: some of that could make sense, but if you are the ceo of a company, where allergan has been able to preserve a stronger platform in a tough and difficult regulatory and pressing environment, i don't know that they want the can of worms. stephanie: is that one valeant is, a can of worms? the week ago, 28 of 30 sell side analyst like it. good point.ise a these companies are very strategic. looking through, valeant has issues, and the stock price is telling you that. allergan does not.

mostly cosmological. there is private pay, so there are no government pricing issues. it is a cleaner platform. pfizer knows what they are doing. it would be a very daring move for allergan to do something with valeant, but i have to say, i think it would be a little dicey. david: beyond that, two very different companies. it, allergannd develops and makes the drugs. essentially, valeant buys companies. growthu go back to real in the economy, a lot of it is financial engineering. they did by a lot of real drugs. out thee: you take business model and mike pearson and you have those drugs. if you are allergan, and you know how to run a drug company,

why not buy them on the cheap? liam: you may have a great point. i just know that if i were the ceo, i would be taking a big risk stepping into a name like that. some of it could be corporate preservation. the other part of it could be not being sure of where the bottom is. david: it is very hard to quantify that risk. erik: i want to talk about john malone. liberty global is a non-us company, one of your biggest holdings. what do you like about it? the guy you mentioned. since i got in the business, john has created more wealth for my shareholders that anyone. this guy has a very good feel for economic value creation. it is not so much focusing on near-term earnings -- he has proven over time that he is able to take assets, grow them,

maximize their value, and then deliver that to shareholders. liberty, in this case, they seem --complex -- liberty media john malone is known for some complex engineering. obviously, the result before themselves, but sometimes it is hard to understand what is going on. liam: a lot of it has to do with him creating the best vehicles to manage what they have and the market valuing them appropriately. the recent moves are a simplification. here are over three businesses. which one looks like it presents opportunity for you? separatethree businesses are presented to the marketplace, he believes he can create more value. non-spinoff a spinoff. liam: he is allowing you to select what you own.

stephanie: we are being too positive. one thing that you would hate, one thing that you do not want to buy. i would not be a bottom fisher in commodity and commodity cyclical stocks. i don't see how you can make money trying to pick the bottom of a valuation where your unit input price is going down. i am staying totally away from that sector. erik: great to have you here. come back soon. liam dalton, founder and ceo of axiom capital management. let's check in with matt miller to see where stocks stand. matt: down across the board right now. /10 of 1%.nly down 1 we would need a lot to end the week up. it would be the first down week in seven.

take a look at mylan and perrigo. mylan shareholders seem to be relieved that their hostile bid for perrigo will not go through. perrigo seemed to be disappointed but maybe they should have tendered more shares. retail is the topic of the week. this is the reason stocks are down for the week. jcpenney, which disappointed with its outlook, nordstrom disappointed on every level. no one knows how to pronounce this, but bebe stores will be closing about 30 locations in the next few years. i have been going through some analyst notes on nordstrom. a lot of them say there is no way to divorce the long-term positives from the disappointments near-term. stephanie will hate this, but the problem is nobody is buying

jackets or coats. sois a really warm fall, retailers say this all the time, and maybe this time i believe them. this is my bloomberg. the red line here is department store retailers. the white line is discount retailers. department store retailers are trying to mimic this discount strategy. for example, the nordstrom rack is not working. and why would you want to mimic a trend like that anyway? abigail doolittle is at the nymex looking at flextronic. >> trading down on weak guidance. cisco account for 5% of the company's revenue.

analysts say the weakness was not priced into the stock. it has been a sideways year with shares trading in a range. the weakness could suggest they are heading back into the bottom of the range. however, shares of electronics trading at a discount to its shares. erik: chuck robbins just reported first full quarter earnings. he says he is more optimistic than ever about cisco's future, but in the near-term, they are under pressure. on the one hand, the weakening economy and the stronger dollar on the other. investors are a little disappointed. cisco is trading down this morning. chuck robbins is with us from san jose. good morning. some are wondering, how will you be different from john chambers?

is not different, you are as positive and optimistic as your predecessor. looking through -- i listen to your conference call, transcript -- it seems to me, if you back out some of the great stuff that cisco is doing, the great results you are generating, your software services products, there is no revenue growth. they account for all of the revenue growth. why is the rest of the business weak?k --so at the i look back corner, we had a strong quarter. 9% eps growth, strong margins. operating margins at a nine-year high. we are pleased with how we executed in q1. forecastingre

growth, although lower than with the street expected. key things where we feel like we are positioned well for the second half. as we look across the world, we had strong growth in countries like china and india, mexico, the u.s. was reasonably good. weakness in canada, latin america. we saw weakness in parts of asia, particularly those areas that have trading relationships or are very reliant on the china economy, impacted by the currency situation. we saw strength in switching, collaboration. you mentioned the recurring revenue as well as our data center switching and computes. we think we have a lot of great elements in our port olio. year, second half of the we have some new products coming out, so we feel will position. stephanie: enterprise spending in general, not unique to sister customers, are down.

ceos are not spending, especially as they look at the global slowdown. how do you combat this? it is not unique to your company but you need those companies to be investing in order to grow. great question. when we think about the enterprise and we talk about the enterprise business, it's important to understand it is about 500 to 700 customers around the world. we look to set up a broad representation of customers around the world. in the u.s., the customer is the fortune for 50 and below. that business is 25% bigger than our enterprise business. that has been positive for 24 straight quarters, double-digit for 18 of those. as a proxy for how companies feel, that is a good sign. it also supports the fact that our portfolio resonates with the customer. if you look at the large not --

multinationals, they tend to cause first because they have more exposure. we have looked at our enterprise business particularly in the u.s.. we had a reasonable quarter, on the low end on a growth perspective, but we are still feeling pretty good about that business. for the new man on the job to think radically about cisco's product mix? knowi'm getting at is, i you have some great new products, and they will probably grow at faster rates, but the rest of your company -- some of it is legacy, some of it not growing as quickly. might you consider doing -vmware, soike emc investors have an opportunity to price your products properly? forstors will reward you growth and shareholders are looking at your growth, and they are not happy. when we think about how our

customers look at what we bring simply, they are focused on how fast the technology drives the business result they are looking for. every customer is looking to become digital. you had walmart on this week, they talked about the need to move digital. the real issue is, they want that architecture, technologies that work together when they come in the door. this is one the reasons for our strategic partnership, so that our technology and apple's technology works seamlessly. you will see us continue to expand our portfolio. we made three acquisitions, we announced four. we sold a set-top box business. we are making the moves we need to to remain relevant to our customers. david: you are a relatively new ceo. i know you are thinking about the next 3, 5 years with the strategic vision. one thing that seems to be

certain is that there will be more and more digits flowing through your equipment. we know that part of the market is growing. as you look for growth in cisco, is it taking overall market share, to what extent does increased innovation increase productivity and reduce demand for your product? think that our technology and products are part of increasing productivity, as they have been for the last 20 years. we built this company based on 15 billion devices connected to the internet. by 2020, we think that will be 50 billion. as we see companies add more and more things to the network, more digital initiatives, we will see a more distributed environment. whether you are connecting minds, retail, oil rigs -- the real issue is not the connection . we will certainly play a key role there.

but taking the data that is available from those connections and helping our customers gain insights from the data most frankly,ly and, securing the data. security is only solved through the network. acketse to look in these pe as they hit the network. erik: everyone is trying to figure out what is really going on inside china. you said yesterday that your chinese orders were up 40% year on year. is that correct? >> that is correct. erik: is china making the transition to a services-led economy faster than some may have thought? that may explain why orders are up so dramatically year on year. you have some scale already. >> we do. we have been in china or 20 years. when we enter countries, we

think about not only what is good for our business, but we think about what is good for the country, driving corporate social responsibility efforts. a few years ago, we began to hit some challenging times. i have been to china almost every quarter for the last three and half years. we stayed focused on the customer, what they need. as a business, our team did a great job of diversifying where we were focused, geographically across product lines, customer sets. i think you are seeing that result now. in january, i said when i went over there, that i thought things were getting better for us. i told our teams internally that i thought it was time to relaunch china. in june, we had our best meetings, and this quarter was reflective of that. team,y, i'm happy for the who has hung in there over the last few years. stay one: i want to that, your team hanging in there.

earlier you said that you want to satisfy your customers, but when we think about technology and innovation, it should feel exciting, and it is these new first generation companies that have that desire factor. and guest was talking about how hard it is for tech companies to get to the next generation. how are you going to insight that in cisco and get your groove on? we like to think about getting our groove on. in the first 90 days, we have talked about speed, speed, and more speed. we have done that with the acquisition we have made, partnerships we have announced, disposition of businesses. everyone here has a high degree of energy. we have also started a new process in engineering or we have a lot of internal startups. three of those have built new technologies that we will bring

to market. we have an announcement coming from that next week. we have been a company that continues to do with transition, continues to meet our customer's needs. we don't have any technology religion. we don't think it is just public cloud, but also private cloud, hybrid of a cloud. stephanie: what kind of announcement next week? >> we talked about it on the call. we have been doing some codevelopment with a web scale customer. we have been working with our intellectual property and technology and they have been involved developing the product. next week, we will make those announcements. i think you will be very pleased. david: want to tell us which day so we are ready to cover it? >> my engineering team did not tell me exactly which date. david: thanks for a much for

joining us today. next, we will reveal the answer to our yearbook game. ♪

david: the let's take a look at the highlights from this week on "bloomberg ." is hisbeauty of asia youth, positive demographics, combined with a large population. you have a healthy, growing domestic market. >> it would be nice to have a national energy plan that was clean, green, was reliable, and where the market would be able to figure out the winners. >> opec is not going away. fundamentally, the question of the legitimacy of the saudi arabia regime which has been based on a lot of oil and cash

and influence, those things are going away. >> most of the company that we deal with regularly, having softness in volume. i see unemployment still in double digits. >> a chinese business person today is happy. it does not mean that we would not all like it to be tens again, but it is the second-largest economy today. terrific.ellen is she has a tough job, and from where i'm sitting, it is getting tougher. >> the majority of people believe in equality is a major challenge. in google, you change a line of code, and a billion people impacted next day. >> radio is digital. if it were invented today, it would be in the digital category. >> we always want to have the latest and greatest, but

sometimes we forget about the important recycling of the technology. >> we need to find the right balance between the digitalization of everything happening, in terms of distribution, retail. retail and wholesale internationally is a big opportunity for us. stephanie: if those names are not big enough, maybe this one is, the final reveal for our yearbook game. buildthe only person to to fortune 500 companies in different industries. ad.is eli brod have a great week. ♪

betty: it is 10:00 a.m. in new york, 3:00 p.m. in london, and 11:00 in hong kong. welcome to the bloomberg markets.

from bloomberg world headquarters in new york, good morning, i'm betty liu. the countdown is on. there are just two weeks to go until black friday. after this morning's retail sales report, retailers are going to need all the help they can get this holiday season. women are breaking the glass ceiling on wall street. goldman sachs announcing it is promoting a record number of women to the firm's second-highest rank yesterday, but is that enough? a record-breaking options -- auction season, some of these cells a record amount of art. who bought what, and for how much. we are a half hour into the trading session. we are down again. markets deskhe